The Boston Redevelopment Authority has decided to negotiate an extension of the deal that enables the Red Sox to turn part of Yawkey Way into a private outdoor food court on game days, despite a warning from the state inspector general’s office that it might not have legal standing to award a new license.
The BRA’s control over the street, which runs out at the end of this baseball season, is based on a determination that Yawkey Way is an area of “urban blight” and in need of redevelopment — a dubious assessment, critics claim.
But the label is consistent with an evaluation made by the state Legislature in 2000, said James D. Masterman, the attorney advising the BRA on Yawkey Way. That year, the Legislature declared the area surrounding Fenway Park to be an “economic development area,” which is defined as a “blighted open area or any decadent area.”
On that basis, the BRA plans to renew the Red Sox’s no-bid contract to sell concessions and souvenirs on the portion of Yawkey Way abutting the ballpark, where the team grossed $2 million last year. The club’s financial gain is merely a side effect of the BRA’s effort to enhance the neighborhood, Masterman said; the public is the primary beneficiary.
Former inspector general Gregory W. Sullivan reached a different conclusion late last year, when he wrote a letter to the agency arguing that a Yawkey Way license should be given by the city government — not the BRA, which technically operates independently — to the winner of a competitive bid process or granted to the Sox through special legislation.
Sullivan, who joined the Pioneer Institute as research director in April, said in an interview that “declaring Yawkey Way as an area of urban blight during game days is the equivalent of declaring Magic Kingdom in Disney World an area of blight during a Mickey Mouse parade. It strains any semblance of credulity.”
Sullivan’s successor, Glenn A. Cunha, declined an interview request.
Eleven years ago, the BRA temporarily took Yawkey Way from city control, citing a state law that grants municipal redevelopment authorities the eminent domain power to commandeer land and “carry out demonstrations for the prevention and elimination of slums and urban blight.”
The arrangement with the Red Sox, the BRA said at the time, qualified as such a demonstration. The agency voted unanimously to take Yawkey Way and issue a license to the Red Sox “in order to protect against urban blight” in late 2002.
Both the license and the BRA’s Yawkey Way takeover expire this year, and the street is slated to return to city government control. To sign a new deal with the Red Sox, the BRA would have to deem Yawkey Way a blighted area again and exercise its eminent domain power once more. Sullivan cautioned the BRA in his letter that such a move could expose the agency to a lawsuit.
The license agreement between the BRA and the Red Sox — which also includes air rights over Lansdowne Street, where the team built the Green Monster seating section — has proven to be a windfall for the ballclub. Originally set at $165,000 for the 2003 season, the annual license fee has increased with the local consumer price index, rising by a total of 28 percent to about $210,000 this year.
Meanwhile, the Red Sox say they have routinely grossed more than $2 million in concession sales on Yawkey Way, and the Green Monster section now yields $3.9 million in gross ticket revenue, three times what it produced in the deal’s first year.
At a conservative estimate of $6 million in total revenue (including in-stadium concession purchases in the Green Monster section), the Red Sox will pay the BRA just 3.5 percent of the revenues generated on the two public streets this season.
The Globe reported earlier this month that the Sox have gone to the bargaining table seeking a permanent extension of the current contract. The BRA, which said two years ago that it would demand a higher fee in the next round of negotiations, has declined to restate that stance but said it will “try to get the best deal we can for the city and for taxpayers.”
The BRA’s authority to grant a license on Lansdowne Street is not in dispute because the agency took permanent control of the air rights behind Fenway in 2002. The Lansdowne taking was permanent to allow the Red Sox to build a large structure, the Green Monster section. But the Yawkey taking was temporary to facilitate an 11-season experiment using the street for game-day concessions, said BRA spokeswoman Susan Elsbree.
The BRA’s control over Yawkey Way already has been challenged once, and a 2008 article in the New England Law Review argued that a court could “conclude that the taking was done in bad faith, with the Red Sox’s financial benefit the dominant reason for the taking.”
An independent publisher of Red Sox programs, unable to sell on Yawkey because of the BRA’s deal with the Red Sox, sued the redevelopment authority in 2003, alleging that the agency’s takeover of the street “is illegal, since Yawkey is neither a slum nor an area affected by urban blight.” But the publisher, Michael Rutstein, quickly dropped his lawsuit.
No one has been able to sue the BRA since then because any challenge to a redevelopment authority takeover must be filed within 30 days.
If the BRA performs a new taking this year, however, it could face renewed opposition and might find itself standing on shaky legal ground in court, said Brian Mahler, an attorney who wrote the law review article five years ago.
“In a new case, I think someone would have a good shot,” Mahler said.
The BRA disagrees. Promoting economic activity on land deemed to be in need of redevelopment is “exactly what we’re supposed to do,” according to Masterman. The agency hopes to avoid a lawsuit but believes it could win in court.
“I think the law’s on our side,” Masterman said.